Technical information

Halcrow was invited by the Public Utilities Commission to carry out a periodic review of the Belize Water Services plan and to review the justification for a substantial tariff increase.

Details

Belize Water Services (BWS) commenced operation in 2001 under transitional arrangements terminating at the end of March 2004, with the commencement of the first five year full tariff period. The Public Utilities Commission (PUC) had the task of regulating the water and sewerage services by determining tariffs for the forthcoming five year period. Due to resource constraints, the PUC sought assistance with the review and Halcrow was invited to provide an overview of the appropriateness of the BWS business plan and financial and tariff models.

The business plan was reviewed to ensure that it addressed capital and operational requirements to enable the agreed level of service and coverage to be met in a cost effective and practical way.

This involved an overview and general assessment of the following:

	Current and future customers/populations
	Current and future demands and demand patterns
	The asset base including condition and serviceability
	Short term rehabilitation needs to maintain serviceability
	Capital investment needs to improve serviceability and to expand the service
	Operational and maintenance requirements
	Customer service standards and phased plans for improvements based on affordability
	Commercial activities of the business
	Legislative provisions within which BWS operates and any possible changes.

The financial model provided the basis for including capital and operating costs in the business plan. The verification of this model required:

	Confirmation of current operating costs
	Understanding of future operating cost projections and allowances for efficiencies
	Review of capital works costs and financing assumptions
	Assessment of the integrity and accuracy of the model in calculating financial costs of the service.

The tariff model took the income requirements from the financial model and analysed various scenarios for charging tariffs to different customer grades to provide the regulated rate of return. The review and development of this model necessitated checking the integrity and logic of various tariff structures.

Two Halcrow engineers worked with the PUC and local consultants in November 2003 to carry out the above review. The lead engineer reviewed the information and prepared a draft report in December 2003. He also discussed his findings with PUC, BWS and other interested parties prior to submitting the final report.